An astonishing poll of estate agents claims that nearly four in ten believe that property on their books is over-priced.
The claim has emerged in a poll of over 200 agents conducted by review site MeetMyAgent.
The poll was conducted between March 20 and 24 and claims to show that 38% of agents believe that more than 30% of their stock is over-priced.
Almost all the agents quizzed – 93% – say that at least one tenth of the property on their books would benefit from a price reduction, and almost three-quarters (72%) of agents say that the main reason for sellers not lowering their prices is that they are happy to wait for the offer they want.
Three-quarters of agents are seeing more viewings than this time a year ago. However, pricing is a real sticking point, with 43% of agents saying that the gulf between what buyers will pay and what sellers will accept is the main reason for sales not being secured.
Low stock levels are a concern for 85% of agents, with the poll showing that 35% say their stock levels are 30% down on normal levels for this time of year.
Ashley Alexander, director of MeetMyAgent, said: “Although, encouragingly, there are no end of buyers viewing properties, very few are actually committing to a purchase.
“The economic climate is doubtless playing a role in this, but so too is the fact that buyers still feel sellers are asking too much for their properties.
“Because servicing their mortgages remains cheap, sellers can play a long game.”
Comments
Dear PeeBee,
Those at the coal face need to change their stances, if an improvement to the workings of the housing market is ever to be inaugurated. They are not the experts, either in this scenario, or in coal mining ;-)
Back on the subject under "debate" below...
Mr RR has amended his latest rantlet on his blogsite. Thought you all may like to cast your eyes over this and comment as appropriate (remembering to maintain decorum, naturally...):
"It may be argued in common law that as soon as an agent accepts an offer on behalf of a seller, the person making the offer then becomes a client of that estate agent. Therefore, all agents have a duty of care to advise buyers about what they are negotiating to buy and thus the level of price which such buyers are intending to pay...
The effect of this is that all agents are, in fact, responsible to see that terms are reasonable in the current market conditions from the viewpoint of all buyers (or tenants) as well as for any particular seller."
Immediately followed by the immortal quote:
"‘Best price’ has to go. It’s that simple."
I'll say nothing - for now. Let's see what those at the coal face make of it.
HC - Apologies, I have been enjoying the BH weekend and EAT was not a priority!
Let's say you're 'non proceedable' offer is accepted, based on you selling. So, you list yours, accept an offer and get the ball rolling only to find 1 month into this, you have been out-bid. Then where does that leave you? Do you pull the plug on your sale as well and start over?
From a selling point of view, a lesser offer is more appealing from someone who has a sale in process or has already sold, rather than dealing with an offer where the foundations purely rely on if, buts and maybes. The chances of hitting a wall ARE signigicantly reduced this way.
If someone makes an offer with their property on the market, their position is confirmed - they WANT to move. There are lot of people out there who view houses as a hobby.
It is the agents job to ensure that Buyer X is a qualified buyer, especially before entering a house on viewing.
A non proceedable 'offer' is always treated with caution by a good agent (if they let it get that far). There are so many banana skins that simply make it worthless.
You can't make an offer when you do not know your own affordability, as you have not sold your home. You don't have a mortgage in principle for your next buy. There is no guarantee that you will sell your house for what you 'need' to be able to meet your ficitious offer.
I know that in my area, a good estate agent will verify who they get in the house. The vendors are much brighter in these parts and most want to know the situation of any viewers when confirming/agreeing to an appointment....rightly so.
So, when you finally do list your home, you are not looking for just the highest offer. You want an acceptable offer from someone who is likely to be able to commit to the full purchase, rather than taking a punt on one of the most important sales of your life. You want as much evidence as possible that the buyer can proceed and means business.
Well to enlighten you further, it's no good working on the principle that house prices can't ever go down. Anyone who understands the nature of investments must understand that.
Investors are usually warned that investments can go down as well as up and anyone who takes the view that such warnings are merely hollow words and cannot apply to houses, is sadly mistaken.
I've blogged extensively about this both here and on the Property Match blog, since I believe there are easy ways of improving the housing market and getting it moving once again - without necessarily having to suffer vast reductions in prices.
Essentially, the idea involves improving the way houses are bought and sold, by making knowledge about current house prices more generally available to buyers. Estate agents would need to take a proactive position on this. They would need to change (or improve) their methods.
If I wasn't constantly being told of bad experiences by clients of estate agents, I wouldn't continue offering an online alternative to them, or keep an open blog offering solutions to the problems - which they themselves are creating.
The question is; is anyone here prepared to do anything to fix the problem? From my enquiries so far, it seems not!!!
If you thought the vacuous expanse of outer space was devoid of substance - lo and behold the greater emptiness of Realising Reality's argument.
Thank YOU, Sir. Enlightening.
Messrs alias PeeBee and Wardy have just shown everyone (albeit unintentionally) why estate agency desperately needs people to introduce new ideas to help them and others like them to better serve those wishing to move house in particular and, to improve the way the whole housing market operates, in general. Thank you.
AofS would you care to answer my questions?
Oh - and back to my "getting" what you say.
FIFTEEN HOURS ago, you tw@ttered: "House prices must find their levels based on current affordability, if the market is to keep on turning over sales."
Current affordability being, as you said WAY BACK in March 2011, "Until the average wage earner can save enough deposit to get a mortgage at 3x their annual income to purchase an average three bed house..."
SO - Mr/Mrs/Ms/Dr/Whatever £25k-a year should be able to buy 27 Acacia Avenue - which according to LR is currently SELLING at £160-odd thousand (and funnily enough, almost EXACTLY the sum YOU were trying, albeit unsuccessfully, to achieve for YOUR three bed semi[you will no doubt now bleat that it was a FOUR bed thanks to the extension that bu99ered up your garden area and buyers didn't like by your own admission...).
Dream on, chum. HPC should make you their honorary mascot.
If prices WERE to return to the levels you suggest, it will have NOTHING to do with you or your rantings. Join the rest of us tiny teeth; accept that you are mortal - and go with the flow.
Ask yourself WHY isn't the income flowing into your website by the bucketload. Could it be that the ones you REALLY need to convince - the SELLERS - think you are even more loco that WE do?
They ain't taking you up on your offer to "Change the way houses are sold" - are they?
Just as well you're a one-man band. Staff need paying and coffee.
Mr RR. I said that I had no intention of offer any proposed "solution" to the "stagnation" you describe - NOT that I had no idea. BIG difference - get it right next time.
The BIGGER difference to mention in response to your post is that I know what my limitations are. YOU, however, are completely clueless and oblivious at to what yours are (which is your biggest and most obvious failing, by the way...).
I do not proclaim to be a champion or savior. I am, as I have said to you before, a tiny tooth on a tiny cog in a massive, massive machine. I value my importance - but without me, the cogs keep turning regardless - just as they did long before my involvement: just as they will long after it ceases.
And with regard to your website - you will please note and agree that I do NOT refer to it by name - I leave that to you, several times per post usually. In my posts here I have not even mentioned its' existence - so to lump me in by inferrence the way that you did, for something that I am wrongly accused of by yourself, is further testament to your OWN failings, I am afraid...
Keep it coming. You seem to enjoy being shot down in flames - I suppose we are therefore providing a service for you!
I have plenty of ideas thanks RR, The difference is I'm doing them, selling houses and getting people moving where as you are just whinging about it.
You see I know how what is required to sell a house, that’s why I’m still trading.
The reason your website keeps being bought up is that it demonstrates my previous point.
WHY THE HELL SHOULD WE LISTEN TO YOU?
That website is the single reason you have this agenda. It’s the reason you post here, It’s the reason you slander agents. All done to make your retirement easier.
'However, to then launch into trying to slur the private house advertising web site which I manage is petty and small-minded.'
Are you serious? I don’t have to 'try' and slur that. You did that all by yourself by proving it doesn’t work.
So, to settle this thing once and for all, neither of you guys have any idea about what could improve the currently stagnating UK housing market.
Well, at least now we all know that.
Thank you both for this admission.
However, to then launch into trying to slur the private house advertising web site which I manage is petty and small-minded.
It's sad that you can't just settle for admitting that you have no new ideas of your own and leave it at that.
RR, your view of market stagnation extends itself to the fact that you cannot sell a single property on your private sellers website, that and you yourself cannot sell your own home.
What you want (for your own personal gain) is for prices to come down, making it EASIER for people like you, to sell property EASILY via a £9.99 website. You detest the fact that you thought it so EASY and have been proved wrong. I would suggest keeping your own house in order before criticising ours. The reason you haven’t sold property, RR is you. Not my fault, Not EA’s fault.
You have entered into a industry you literally know nothing about, that’s plainly obvious by some of the language you use. It’s laughable that somebody who has not carried out a single market appraisal in his life should come here and tell us how to we should do it.
You also like to talk about 'marketing'. Do you even know what that means? I could talk to you about click through rates, PMA, the ASA, redress but you wouldn’t have a clue would you? The short sightedness of your argument beggars belief.
If there is one good thing about this market is that it keeps the chancers out of the game, People that think it can be done on the cheap. You are blatant proof that it can’t....Thank you.
Apologies to all before I start.
Mr RR. You keep asking me to put forward my own ideas for "releasing the market". I have repeatedly told you that I have no intention of offering any. Unlike yourself, I do not consider myself to be a supreme force; a modern-day King Canute, who can control tides with a wave of his hand.
The housing market may as well be controlled by the tide. IF it was only just need or desire that fuelled it that would be hard enough. Nothing and no-one can measure, dictate nor budget for the ebbs and flows that simple human traits control.
External forces to it (economy, employment, death; divorce - the list goes on exponentially...) take the simple by definition human factors and bu99er them up completelt. Each trait then has a million facets - and each of those facets has a million facets of their own.
And you claim to have the key to "control" THEM ALL! Funny, that - there isn't an individual on the planet who can control THEIR OWN human traits - never mind those of seven billion others...
Hey - maybe you can. Maybe we are all wrong and you are right and our skepticism (another human trait that you have given no evidence of being able to control... or am I simply being an uber-skeptic?) is based upon fear of the unknown rather than the known (the 'known' being that in ANY market, a percentage of homes offered for sale fail to sell due to the billions upon billions of facets I refer to above...).
Thing is - you haven't been able to prove your "plan" as you have called it previously, have you? You offer no evidence of it working. You have not one single case study - not even YOUR OWN HOME, which failed to sell recently, despite being fully marketed by at least two Estate Agents of YOUR CHOICE. You, the expert - the self-named "Consultant in Housing Valuation".
I work on FACT, not theory, Mr RR. And CERTAINLY NOT the skewed views and twisted statistics of someone with an agenda so poorly hidden that it walks into a room a week before him.
So - King Canute - where from here?
PeeBee,
For the benefit of those who are reading this, I shall keep responding in an effort to cast clarity on these important matters.
Market Stagnation:
You still don't seem to accept that there is a crisis in regard to the stalling of the UK housing Market, which is worse on some parts of the country than in others. You appear not to recognise or acknowledge that fact. Neither do you appear to propose any remedies of your own for curing the problem. On the other hand I am keen to examine this problem and find cures to help all house owners.
Your wish to maintain current asking prices:
You appear to be keen to support the current level of house prices across the board, whereas I do not suggest any particular level of prices should be preserved or maintained, other than market prices.
You seem to be utterly committed to not allowing prices to find affordable and economic levels but to what end, I ask?
The affect of doing this on the market itself:
You appear to be unable to see that if prices are unaffordable to large numbers of the populace, this must have an impact on the number of sales capable of being achieved. By comparison, I see this as being extremely detrimental to the wellbeing of the housing market and hence to those wishing to move house currently. In fact, our whole economy is suffering as a direct result of allowing unsustainable asking prices to swamp the housing market and stall it.
My alternative suggestion for freeing up the market and to benefit both sellers and buyers simultaneously:
This is what I am proposing. It involves upgrading the way asking prices are arrived at using better appraisal techniques than currently exist.
My question to you is, what are you proposing to achieve freeing up the market to the benefit of sellers and buyers simultaneously and how might your suggestion be implemented?
I haven't seen anything concrete from you about this yet.
This is what the above EAT article is actually supposed to be about so, how about giving us some response; give us some fresh proposals, instead of just trying to deny (along with your cohorts) that there is even a problem!
By the way, please stop trying to wind me up with your talk of gnawing at my heels whilst I am supposed to be puffing like a knackered old steam train. It's rubbish I'm afraid. Let's be professional and just deal with the issues instead, if we must debate these matters in public?
RR. UNLIKE you, i have a good memory. From one of you many, many previous rantings:
"After all, you simply cannot blame interest rates and lenders are prepared to lend at least up to 3x annual income.
Who can blame them though, for insisting (mostly) on a max loan-to-value ration of 75%?
If all asking prices were framed with careful reference to these parameters, people could afford to buy.
When economic conditions change manifestly, as has now happened, the market must respond with similar changes in asking prices. It has not - yet.
A recent comment in The Times says:
… Until the average wage earner can save enough deposit to get a mortgage at 3x their annual income to purchase an average three bed house, prices are going to drop, it's not rocket science.
I concur with this. Houses have to be 'affordable' to the populace, otherwise most people just won't be able to live in them."
Unless you can convince me and other readers otherwise, in the above you are suggesting that the price of a average house needs to come down to 4x the average SINGLE wage, or thereabouts.
I would call that a "butchering".
Oh, I "get" you all right, RR. Better than you "get" yourself.
You just don't like me gnawing at your heels. You should be well accustomed to it by now - and I ain't going away.
I might even step up a gear. I'm sick of ticking over while you are puffing like a knackered old steamtrain...
PeeBee,
Reading what you have just written, you just totally do not 'get' what I am saying.
I'm glad you have shown us that but not so glad to have to try and explain the fact to you.
Oh damn! And I wasn't going to be dragged into his MDT again...
"I'm not about holding back house price increases you know. I am about helping to restore the throughput of sales, for the benefit of everyone."
You complete, utter, total... AAARRRGGGHHH! For once, words fail me (at least publishable ones...)! "Helping" - my foot!
In order to accomplish the second sentence of the above 'plan', you call for prices to be BUTCHERED.
In the crazy, disjointed world that you live in; assuming that this actually happened, then sales would start skyrocketing again - causing...
ANOTHER BOOM. (just like it does on a cyclic basis)
You just don't get it - do you.
YOU cannot offer anything to control the market. THE GOVERNMENT cannot offer anything. The only ones that can are the PROPERTY OWNERS. They - and they alone - hold the key. And yes - the pun WAS intended.
You should have stuck to valuation surveying. At least that way, Agents did all your work for you and told you what the REAL value was...
The idea that lower asking prices would tempt more buyers into the marketplace is not exactly new. The Express Estate Agency have been using this pitch as a contrast to any overvaluing. Vendors just have to be convinced of this approach, which in this case the EA involved is upfront about.
http://www.expressestateagency.co.uk/
PeeBee and friends,
I'm not about holding back house price increases you know. I am about helping to restore the throughput of sales, for the benefit of everyone.
The stats, graphs and indexes tell it all and indicate what has been going wrong but you and your associates are simply taking no notice. If you aren't yet convinced there's a problem please, just read the papers and follow the news about the housing economy. It has stagnated.
It's no good trying to pretend that it hasn't happened.
Back to basics chaps.
Can anyone tell the difference between:-
1. House Value
2. Surveyor Valuation
3. Estate Agent Appraisal
4. Asking Price
5. Selling Price
Swap the figs in the story!
62% of agents think their property is correctly priced
38% of agents think 70% of their property is correctly priced.
Spin and more spin.
(Realising Reality is completely bonkers)
The debate as to whether vendors or EAs set asking prices is no doubt going to rage on. No-one's mentioned what role the media plays in all of this though...
How much do vendors who think their house price has gone up in recent years rely on the media for that information? If the media were to have a pro high house price bias, how much would that contribute to allegations of overvaluing?
Right - without reference to previous posters' offerings...
1. This is, allegedly, a poll of some 200+ Estate Agents carried out by a company that, as far as I can see (feel free, Ms Fateh, to contradict me with facts...), does not have 200 Agents on its books to ask...
2. Of these supposed 200+ Agents, LESS THAN four in ten of them allegedly state that "they believe" that 30% or more of their properties are "overvalued". NOT "four in ten", and NOT "a third of their properties" as the storyline suggests. And THEY BELIEVE that to be the case. Funny that - every Agent I know can tell you in a heartbeat how many properties on their books ARE overvalued...
3. Most Agents allegedly state that ten percent of their register is overpriced. And...? I would give this the "No Sh!t, Sherlock" award of the day...
More MDT spewed out by these fatally flawed businesses in order to drum up attention to themselves like fish flapping on the deck of a boat.
Mr Alexander has, as far as I can establish, NEVER worked in residential Estate Agency - so he is obviously supremely qualified to comment on how and why "sales are not being secured".
Sorry - its a barrel of cr@p - but at least it has opened the floodgates for the usual suspects as I anticipated...
AofAS - some answers to your questions
a) I dont care who views my propety.
b) I will continue to accept other offers until they are in a position to proceed
c) I am hoping to find a my next property, If I see a suitbale one i will make an offer subject to my property being sold.....the vendor can accept or decline. If they get a better offer before I am in a position to proceed....hey thats the way it goes
I doubt many people that view houses are proceedbale unless thy are cash buyers or investors.
A couple of questions for you.
What is he difference beween a property being on the market with no offer and not being on the market at all?
My position has been made clear to all the agents that I have contacted to view properties, not one has declined the viewing......would you?
Happy Chappy -
My point is when you sell your house, do you want to be holding viewers for people who are not proceedable? What happens when they make a fictitious offer? Why on earth would you even consider accepting it?
So, when you're viewing these houses, what are you trying to achieve? What happens when you see the dream house for you (and your own is not even on the market, far from a sale even being agreed).
Would you accept an 'offer' from someone who's house is not even on the market yet and are reliant on their own sale to proceed? The 'offer' is worth less than the cost of the phone call to make it.
Happy Chappy -
My point is when you sell your house, do you want to be holding viewers for people who are not proceedable? What happens when they make a fictitious offer? Why on earth would you even consider accepting it?
So, when you're viewing these houses, what are you trying to achieve? What happens when you see the dream house for you (and your own is not even on the market, far from a sale even being agreed).
Would you accept an 'offer' from someone who's house is not even on the market yet and are reliant on their own sale to proceed? The 'offer' is worth less than the cost of the phone call to make it.
@Chris,
Supply and demand are the primary factors that dictate deals in a 'perfect' market.
The UK housing market is an extremely imperfect market (unfortunately). It's crying out to be made more perfect. Unquestionably, the best people to do that are estate agents but oddly so far, they have all pretended to be be Lord Nelsons instead.
Your muse sounds good but if everything was as hunky dory as you suppose, then why then are most of the estate agents that I know basically sh:-t scared of achieving insufficient throughput this year - threatening their very existences?
I agree with your statement that "Most agents have fairly low stock levels and any buyers out there are often struggling with choice", but how do you square that with your earlier statement saying "sufficient transactions are taking place to pay the bills, so everything is nicely balanced"?
Oh Lord Nelson! The housing market is stagnated. Please, please, look at the data. Surely you must really mean finely balanced - teetering on the brink even!
I would venture to suggest that the extreme drought in completed sales is because too many buyers have been frightened off by excessive asking prices, in the current climate. These are being determined by estate agents in liaison with their vendor clients.
The important bit though is; every estate agents should take the lead role in appraising and agreeing guide asking price levels with their clients, by following the pulse of the market.
Instead they are now shooting each other in their feet by testing the market with unachievable prices.
Isn't that a good enough reason to embrace change (before it is too late for these poor mortals)? I think society now needs to set up 'estate agent hospitals' and we need them urgently to save them from themselves. Pretending otherwise, as you are trying to do, is pure folly and I don' buy it, sorry.
Why are you all trying to predict what will happen next?
The housing market will take it's natural course based on supply and demand.
House prices are currently stable. Sure they go up one month by a fraction and down the next by the same amount, but because prices are stable, it must mean that the supply and demand are perfectly matched. :-)
The fact that estate agents are still open for business indicates that sufficient transactions are taking place to pay the bills, so everything is nicely balanced.
Technically, as Rant keeps reminding us, prices are actually falling when you factor in inflation of 3 to 5% per year, but hey.
Unemployment always overshoots the end of a ressession and continues rising even when businesses are turning things around again, so we shouldn't base the end of a ressession on unemployment figures.
House prices are always sticky up so anyone waiting for further big house price falls, they could be waiting a long time. Banks have managed this crash much better than the last one in the early 90's.
They have dropped lending rates making it easier to keep the payments going even if one earner loses their job and the need for a large deposit to buy the next property, vendors need sufficient equity after they sell to buy again, has meant that vendors can't give their homes away either. The lenders have also held back in repossessing people for as long as possible and when repos do come up, they are not always priced as low as they would have been in the past.
Most agents have fairly low stock levels and any buyers out there are often struggling with choice. Good properties in good area's are still making good money fairly quickly and often this is fairly close to peak property prices, it's just that run of the mill stuff has lost 18% from peak.
Eventually prices will be much higher than they are today, but whether this is months, years or decades away, no one can be sure, but one thing is certain, supply and demand will drive this not HPCer's or Estate Agents.
@Happy Chappy.
It's the buyers who ultimately decide what they are prepared to pay for a property - in case you may be in any doubt.
Marketing at an over-exaggerated asking price simply tends to put buyers off.
Marketing at a justifiable price level tends to encourage buyers and build their confidence in buying.
Sometimes, by doing this, an agent can attract several offers from different (competing buyers) and this can result in a higher price being paid than was originally asked; sealed bids even.
This then becomes the market price.
This would not have happened if too high a price had been asked initially. In such a case, doing that tends to put buyers off and results in increased market stagnation instead. That's whats tending to happen generally right now.
So, to answer your question explicitly, marketing an overvalued property will not help and cannot 'create' a proceedable buyer.
A quick question, Does marketing an overvalued property help create a proceedable buyer ?
@RR
Wardy summed it up – yes okay sod it we all agree with you so for the love of god stop dribbling on about and go and do it / stand by your convictions / change you own business to be in line with it then make it work then franchise it.
Wait to hear from you with just 1 example of where it has worked (ill even try and forget you didn’t do it when you put your own house up for sale) Then you can tell us we were all wrong and you were right and we will all be with you.
Jonnie
But not with you RR, you add nothing except a laugh. The man who couldn't sell his own property..........
Attention all Brians:
How about the issues?
There is a significant problem with 'marketing methods' waiting to be discussed.
RR runs the rubbish property-match private site., his own profile lists his job title as "other", now that throws up a lot of options for him!!
Realising Reality,
You are absolutely correct, I agree with you 100%.
I’m looking forward to hearing about you’re success when you get your first client under offer. Please get back to us when this happens.
Waiting with baited breath and fingers crossed.
Who is this idiot Realising Reality?
If any estate agent singularly adopted your ethos in their town, you are absolutely right, their business would die within 4 to 6 months.
These can only be the comments of someone who has never run or owned an estate agency business.
You are cracked mate!
I agree, most contributing here are missing the point. The poll shows that: "Four in ten agents say one-third of their homes are over-priced." The poll also suggests: "The gulf between what buyers will pay and what sellers will accept is the main reason for sales not being secured."
My question is:- How, exactly, does over-valuing to get instructions square with getting the so-called "best price" in the market?
Instead, it causes the market to stagnate! The result is plummeting sales owing to confused sellers and buyers withdrawing because they are fearful of future price falls.
In my opinion the blame for this should be laid, fairly and squarely, at estate agent's doors.
Until they take responsibility and change the way they assess house values to chart and follow market prices more closely, market chaos will continue. It will have to continue for as long as inadequate valuation appraisal techniques are being used by estate agents.
When are agents going to wake up to this?
I am calling for more focus on the cause of this, now very big, problem!
To Jimmy's post I would say:- "The need to deal with greed is clearly now decreed."
It's not about recessions, price nadirs, income multiples, or long-game tactics, its about following 'market prices' more effectively and using them to market houses far more effectively.
Doing this would keep sales moving. I think Simon Ward does have a valid point here.
My clarion call to all agents now is "Follow the market - or die."
I think we're all missing the fact that this is a blatant ad for another review site, quite an atrocious looking one for a start! How on earth did they drum up 200 agents to give their reviews when they barely have any on their site?
astonishing?????????
PbroAgent, but any FTBs looking to have a realistic chance of completing before the SD deadline would most likely need an approval before the end of Jan. Remember too that this is a 15% drop from Jan, so from a low base (and Febs figures are probably flattered by some additional FTBs chancing it).
To put it into perspective, if you look at the end of the last SD holiday (end of 2009), transactions dropped by more than half when it ended and who knows what they would have settled at if the SD holiday mk2 hadn't been introduced shortly after.
This time of course only FTBs are elligible but you know yourself how many transactions in each chain are reliant on an FTB at the bottom. Given how chains have completed over the past few years due to these additional FTBs, how many chains is this going to affect now its gone?
With regards to stock levels dropping, this is to be expected - remember movers are zero-sum ie they don't change anything in terms of supply/demand, whereas FTBs add demand (just as probates for example add supply). So effectively, the extra FTBs have been eating into inventory - again, as their numbers drop, I fully expect this to start building up again.
I guess we'll find out soon enough whether it pans out like this though.
@Neo. I'm not sure why a decline in mortgage approval numbers in February would correspond with the SD deadline as it didn't come into effect until the end of March. Also I don't think many FTBs were even aware the the exemption was due to end much more than 3 months ago.
After speaking to friends and colleagues in other branches, we all seem to have recorded some decent numbers in Peterborough this March. Of course every market is a micro-market, but now we are experiencing a general shortage in new stock and there is nothing here in what we've seen so far this year to suggest that prices are going to change much at all (of course this could all change at a moment's notice ;o)
Monkeytennis - So you live in a house you couldn't otherwise afford, subsidised by others - kind of like a council house really - well done you!
I'm sure you got a tracker not because you couldn't afford a fix but because you could see base rates dropping to record lows - you canny investor you.. And providing that for the next 15 years you never have to relocate, or get divorced and rates never rise, you'll be just fine. Probably.
Oh and for every one who lucked into a BRT, there are many who didn't - and they'll be the ones setting prices ;-)
Hi AofS
My position was explained before the valuation, listening is part of the process as well
Please explain why you think I am restricted in viewing?
I have not been refused one viewing so it appears it does not matter if my house in the market?
Are all people with there property on the market actually proceedable
Well said Jonnie, good words!
"sounds like you live in the shit bit?"
You mean outside the south east? ; )
The increase in SVRs is just one of a number of factors hurting people's finances right now. There might not be a ton of bricks about to land on the donkey's back, but the number of straws is definitely increasing.
@rant,
The thing you miss (or seem to) is that not everyone that has a mortgage is knackered and won’t be able to manage a bigger direct debit, I get this tick tock thing and all that but don’t let yourself be given hope for the HPC thing going your way on tit bits like this. The thing you need is a huge oversupply of property made up of lots of distressed sellers and I don’t think this is going to create enough of them.
You and the HPC chaps talk a lot about your savings and savvy investments etc, well you do know this isn’t the sole preserve of HPC’ers in rented, there are these fools as you see them that bought houses quite recently that do the same and are quite well off – you give the impression that you see any home owner as some skint desperate soul that’s going to have to give in to the torrent of bad news and sell cheap to you any minute but its not the case, for some people cutting back is a £5,000 holiday not a £7,000 one or changing car every 3 years rather than 2
There are HPC’ers on this thread going on about council tax and gas bills?! but I promise you all there is a huge part of the population, many of them with a mortgage that don’t care what their gas bill as its not something they need or want to think about.
…………………or maybe the ‘market of two halves’ in the lead article here today is a country of two halves and it sounds like you live in the shit bit?
Jonnie
The Co-op is just one lender in an increasing line who are raising their SVRs. The fact that this can happen when the Bank of England rate remains the same has caught many mortgage payers by surprise. So it wont effect you, but there are now over a million mortgage payers who will be facing a rate rise over the coming weeks and months. This comes at a time when many are trying to pay rising fuel and food bills with static wages. Tick tock...
I don't have to wait for a crash to start. As the first story on EAToday highlights, it's already well under way in numerous regions and I'm in one of those places.
@ Rant& Raver
Co-op have about 6 mortgagor's on their books - big deal.
What about those millions who are on trackers at 0.5% - 1% above the BOE base rate., I'm one of them by the way. I pay £500 per month on a £400k mortgage, everyday I look out on the view I have over the local countryside and thank my lucky stars, the mortgage doesnt need to be paid of til 2027 by which time my kids will be adults and we will be looking to downsize anyway.
My wife would like to move just for the heck of it as we've been in the house for 10 years but when I tell her it will cost nearly 4 TIMES to rent the equivalent and that we wont be able to get a mortgage for a home unless its less than the value of our existing place she goes off the idea.
There are millions like us out there Rant and its keeping supply nice and tight supporting current values, and you will be in for a hell of a long wait waiting for this crash of yours .
Property isn't overpriced, it's just that noboday can afford it!
Class.
@ PbroAgent - no argument that prices have been steady over the past 12 months but it is very likely this has been propped up by FTBs trying to beat the SD deadline (the early evidence indicates this is the case e.g. mortgage approvals were down 15% in Feb compared to Jan). Also, look at the cost of lending - I've seen some of the best 75% LTV deals be pulled since the turn of the year.
All this against a backdrop of increased SVRs, rising unemployment, and dropping disposable income. If prices remain stable over the coming 12 months it will be nothing short of a miracle.
So as volumes dwindle and consist of a higher proportion of motivated sales, those vendors dreaming of achieving peak prices will be forced to either pitch their (increasingly absurd) asking prices against those being more realistic or otherwise take it off the market. Either way, fewer proceedable buyers with less funding available means EAs need to sort themselves out and stop raising vendors' expectations if they want to survive.
Realising Reality- What ever are you on about you fool? Who has clout in the industry, not one individual, you muppet, you may have not noticed all your rant posts like the HPC nutters have changed, well nowt! Just button it fool
More and more people wanting to buy with less and less money. I can't see how you can use that data to fortell market changes with any accuracy. So are properties overpriced, or are they unaffordable? There is a difference.
Jimmy: 'At the beginning of it... '
I agree - although we could just be in the middle of an 8-10 year slump. My point was that, in the most optimistic, rose-tinted scenario (as peddled by the government and mainstream media) we are at the end of a recession.
What I forgot to point out was that in 1997 we were NOT at the end of a recession. The early 90s recession finished (in a technical sense) in 1991, and even the non-technical 'feel-bad factor' recession was over by about 1995.
So in comparing 1997 to the present we're comparing a relatively healthy, post-recession growth market with the middle of the worst slump in living memory.....and still house prices are nearly twice as high!!!
And then we get brain-dead numpty agents trying to make out 1997 was a recession and today isn't....do me a favour....
@Rant - yes you are correct, but I'm not suggesting prices will rise, just that they won't fall much further and as house prices fall, static rents will mean yields will increase for B2Lers.
@No Bull, whilst technically the economy is not in recession (2 quarters of negative growth etc) we are not exactly in a period of booming growth either. I would suggest that we have more of this stagnation to come.
@Neo. Average sold prices here have been steady for about the last 12 months. The issue though is that many buyers coming to the market bought after 2004 (when prices were last at this level here) and are thus chasing lost equity. It is not at all unusual therefore for houses to come on the market close to peak prices, as vendors chase this lost equity (and yes, as agents over value). So whilst my "bargain prices" are probably the true market value, it's unlikely that asking prices will fall too much until intrest rates go up significantly as vendors are under no pressure to sell and consequently under no pressure to offer low asking prices. Meaning that for the foreseeable future the "market value" will be the overblown prices vendors want and the true value will continue to look like bit of a bargain to the uninitiated.
“Because servicing their mortgages remains cheap, sellers can play a long game.”
Co-op to raise SVR by 0.50% from 4.24% to 4.74% on 1st May according to BBC breaking news:
http://www.bbc.co.uk/news/business-17585150
Any house that hasn't sold in 4 weeks is either marketed badly or overpriced.
@ PbroAgent on 2012-04-02 11:23:46
"The truth is that we don't need price reductions of 65%, we only need reductions of 10-15%. Why do I say this? Experience - whenever we have a property on our books with a price in the region of 10% below the "market value", we end up with buyers falling over themslves to snap up a bargain."
And then the market value becomes whatever the - ahem - "bargain" was sold for. Rinse and repeat..
Interesting one this and as usual its attracted views showing an astonishing (but perfectly understandable) lack of understanding of the EA business from some parts – and old RR popped up with comedy timing as predicted by Peebee.
@FirstTimeBuyer – keep the faith mate, im happy for you that you can keep that warm feeling inside by doing all these sums and calculations with the bits of data you cunningly find on the web – good on you and well done……………..you do need to change you name though, you are not a first time buyer as you are not in the process of buying and I would suggest you wont be anytime soon as a 60% drop at current decline rates might take a while.
@BRIT1234 You don’t want to be distracted by meaningless %’s as there is no fixed rule, do it this way, wait until you are absolutely happy that it’s the time for you to buy, then you and Mrs BRIT see the lady at the building society and sort out how much you can borrow / afford and go and look at houses in the area you want to live in, when you walk into one that makes you feel nice inside make an offer of what you are willing to pay, the owners will either say yes or no, its the best way of buying and has worked for the thousands of people ive sold houses to over the years, in short buy with your heart although remember its likely that your Mrs will have the final say, they always do.
So to the point……………..100% of my stock is overpriced, all of it, I know this because if it was all the right price it would have all been sold this weekend – every last brick of it.
Jonnie
No Bull ??? At the beginning of it...
You call that a recession, THIS is a recession!
pbroAgent: 'Does it not occour to you that in 1997 we were at the end of a recession....'
And where the hell do you think we are now, you numpty?????
Buyers would do best to wait until the end of this recession when prices will be at a nadir. I'd say around 5 years time.
Would the reverse not also apply PBro re BTL and yields? If house prices rise from here, tenants who haven't had pay rises and are struggling with rising utility bills etc wont be able to pay higher rents. Ergo, yields on BTL will diminish and become less attractive?
@ FirstTimeBuyer
Does it not occour to you that in 1997 we were at the end of a recession and that house prices were at a nadir? Therefore income multiples could only ever increase from that point.
The truth is that we don't need price reductions of 65%, we only need reductions of 10-15%. Why do I say this? Experience - whenever we have a property on our books with a price in the region of 10% below the "market value", we end up with buyers falling over themslves to snap up a bargain.
If you want to wait for prices to fall 65% you will be in for a long wait - it just aint gunna happen, as all of the first time buys will have been snapped up long before by B2Lers as the yeilds go through the roof.
AceofSpades. It is this 'best price possible' or greed as I would call it, that fuels the problem. It is 'best price quoted' that motivates the agent. How many ask "what else have you been quoted?". Don't say none, coz I've had plenty round my house over the years. The only reason they quote higher is because human nature can't resist greed, along with curiostity and envy. The history of The Roman Empire has plenty of examples proving that.
Sole agency agreements also add to this practice. An overpriced vendor will soon reduce when their ideal purchase comes on the market. Stuck with the dishonest agent though, for the next sixteen weeks. Anyone who knows the acronym RACERS will hear what I'm saying.
Please don't blame the vendors. They do exactly what you tell them to.
What is the average % that estate agents overvalue so when I make an offer I can take it off? Is it 10%, 15%, or 20%?
Being serious I know that overvaluing the asking price puts off buyers like some of my friends and myself off even looking.
I also do realise it is not always the estate agents fault with a string of deluded stubborn sellers far to optimistic on what a property is worth.
An Astonishing poll...........Unfortunately for Estate agents, every FTB who will be searching for a house has the internet................which leads them to sites like HPC which gets hundreds of thousands of hits every week.
..........................................................
In 1997, according to the Office of National Statistics, the national average wage was £16,666.
According to the Nationwide Building Society the Average House price in 1997 was £55k.
£16,666/£55,000 = 3.3x INDIVIDUAL salary [mortgage]
********************************
The Average First Timer Buyer mortgage multiple in 1997 was just £41.5k [Council Mortgage Lenders]
And the Average FTB mortgage multiple in 1997 was in a range of 2.3x - 2.5x Salary [Firstrung]
************************************************
By 2007, at the peak of the boom [according to the Office of National Statistics] the national average wage had risen to £23.5k
The Average House Price in 2007 was £185k. [Nationwide Figures. Halifax had estimated AHP higher than £185k]
£185,000/£23.5k = 7.8x INDIVIDUAL salary [mortgage]
************************************************
2011 Average House Price £166,764 [Nationwide]
2011 Average Wage £25k
£166,764/£25k = £6.6x INDIVIDUAL salary [mortgage]
*****************************************************
The average house Price tripled in a decade, from 1996 - 2006 as the median UK wage rose by just £6.5k.
And even if the average house price lost 60% of its massively overinflated peak price tag, to take it back to its long term measure of affordability, [and the Base Rate returned to its long term average of 5%]
Utilities tripled under Labour. councuil Tax doubled. We saw rising inflation in food etc.....
Au Revoir.
I agree with FirstTimeBuyer but would like to add that it's vital for asking prices, not only to be correct but also to be relative to one another in terms of current valuation.
If this is not achieved by estate agents enhancing their valuation service, people will not be able to move to another house successfully.
Housing market stagnation will continue as the unavoidable result and this will hurt most estate agents too.
The Average House Price needs to drop by 60% from peak prices, to meet the historic measure of affordability.
And thats not taking into consideration, the fact that everything else is so expensive, in comparison.
Utilities have tripled, and Council Tax has doubled, since the last time house prices were 3 - 3.5x salary.
60% of the time, it works every time.
Happy Chappy - I think it is safe for any agent to assume that any vendor wants the 'best price possible'. If you want a quicker sale and to reduce your price accordingly, that's something you raise at the beginning - a Valuation is a two-way process.
Imagine if an agent assumed a vendor wanted a quick sale and prompted them to price with that in mind? Would never work..
Also, I feel that you will be restricted in your viewing (and certainly making 'offers') if you are relying on selling a house to buy your next, if you are not even on the market yet.
As a potential vendor yourself, you will appreciate that they want proceed-able viewers arranging appointments. Not someone with a fistful of 'if, buts and maybes'. Harsh it may sound to you, but its the reality.
What more can I say?
I just hope that someone with clout in the agency sector takes these messages seriously because most house owners would prefer to get the market moving sooner, rather than later.
Jimmy, speaking as a potenial vendor, I value my property at 10-15K less than the 2 agents that have come and valued it, they had badgered me to come and do a free valuation (sales pitch) after i contacted them for viewings.
I explained to them both, my wife has not found anywhere she wants to move to yet, so i do not want to put my property on the market. They assumed i wanted the best price possible...when I said NO! I want to secure a price that will allow me to proceed with the purchase of another property in the shortest timescale possible, they seemed perplexed!
Oh, Dear. By printing this story, EAT has just opened the door to you know who again - and I can hear him furiously bashing away at his keyboard from nearly 200 miles away...
Nonesense. Nine out of ten agents overvalue at least just to get the instruction, with the remainder overvaluing just to stop anyone else selling it.
No doubt some of the worst culprits will shortly post that they would never dream of overpricing, its always the vendors fault. Yeah, right.
This is not a surprise - speaking as an agent; when the pot vendor is disapointed with your opinion you have just moments to decide to (diplomaticaly) walk away OR take the instruction assuming client will accept markets verdict after an aggreed timetable.
But sometime you mis-judge clients determination.... .!!